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Editors Note: Ordinance No. 8440, § 22, adopted January 23, 1995, repealed regulation 19-110.2. Formerly, such regulation pertained to income-producing capital: manufacturing equipment; job printing equipment and derived from Ord. No. 6674, § 3, 3-23-87 and Ord. No. 6938, § 21, 4-25-88.
(a) Definitions.
(1) "Computer hardware" (also called "computer equipment" or "peripherals") is the components and accessories which constitute the physical computer assembly, including but not limited to: central processing unit, keyboard, console, monitor, memory unit, disk drive, tape drive or reader, terminal, printer, plotter, modem, document sorter, optical reader and/or digitizer, network.
(2) "Computer software" (also called "computer program") is tangible personal property, and includes:
a. "Operating program (software)" (also called "executive program (software)"), which is the programming system or technical language upon which or by means of which the basic operating procedures of the computer are recorded. The operating program serves as an interface with user applied programs and allows the user to access the computer's processing capabilities.
b. "Applied program (software)", which is the programming system or technical language (including the tape, disk, cards, or other medium upon which such language or program is recorded) designed either for application in a specialized use, or upon which or by means of which a plan for the solution of a particular problem is based. Typically, applied programs can be transferred from one (1) computer to another via storage media. Examples of applied programs include: payroll processing, general ledger, sales data, spreadsheet, word processing, and data management programs.
(3) "Storage medium" is any hard disk, compact disk, floppy disk, diskette, diskpack, magnetic tape, cards, or other medium used for storage of information in a form readable by a computer, but not including the memory of the computer itself.
(4) A "terminal arrangement" (also called "'on-line' arrangement") is any agreement allowing access to a remote central processing unit through telecommunications via hardware.
(5) A "computer services agreement" (also called "data services agreement") is an agreement allowing access to a computer through a third-party operator.
(b) For the purposes of this article, transfer of title and possession of the following are deemed sales of tangible personal property and any other transfer of title, possession, or right to use for a consideration of the following is deemed rental, leasing, or licensing of tangible personal property:
(1) Computer hardware or storage media. Rental, leasing, or licensing for use of computer hardware or storage media includes the lessee's use of such hardware or storage media on the lessor's premises.
(2) Computer software which is not custom computer programming. Such prewritten ("canned") programs may be transferred to a customer in the form of punched cards, magnetic tape, or other storage medium, or by listing the program instructions on coding sheets. Transfer is deemed to have occurred whether title to the storage medium upon which the program is recorded, coded, or punched passes to the customer or the program is recorded, coded, or punched on storage medium furnished by the customer. Gross income from the transfer of such prewritten programs includes:
a. The entire amount charged to the customer for the sale, rental, lease, or license for use of the storage medium or coding sheets on which or into which the prewritten program has been recorded, coded, or punched.
b. The entire amount charged for the temporary transfer or possession of a prewritten program to be directly used or to be recorded, coded, or punched by the customer on the customer's premises.
c. License fees, royalty fees, or program design fees; any fee present or future, whether for a period of minimum use or of use for extended periods, relating to the use of a prewritten program.
d. The entire amount charged for transfer of a prewritten ("canned") program by remote telecommunications from the transferor's place of business to or through the customer's computer.
e. Any charge for the purchase of a maintenance contract which entitles the customer to receive storage media on which prewritten program improvements or error corrections have been recorded or to receive telephone or on-site consultation services, provided that:
i. If such maintenance contract is not optional with the customer, then the charges for the maintenance contract, including the consultation services, are deemed gross income from the transfer of the prewritten program.
ii. If such maintenance contract is optional with the customer but the customer does not have the option to purchase the consultation services separately from the storage media containing the improvements or error corrections, then the charges for the maintenance contract, including the consultation services, are deemed gross income from the transfer of the prewritten program.
iii. If such maintenance contract is optional with the customer and the customer may purchase the consultation services separately from the storage media containing the improvements or error corrections, then only the charges for such improvements or error corrections are deemed gross income from the transfer of a prewritten program and charges for consultation are deemed to be charges for professional services.
(c) Producing the following by means of computer hardware is deemed to be the activity of job printing for the purposes of this article:
(1) Statistical reports, graphs, diagrams, microfilm, microfiche, photorecordings, or any other information produced or compiled by a computer; except as provided in subsection (e) below.
(2) Additional copies of records, reports, manuals, tabulations, etc. "Additional copies" are any copies in excess to those produced simultaneously with the production of the original and on the same printer, whether such copies are prepared by running the same program, by using multiple printers, by looping the program, by using different programs to produce the same output, or by other means.
(d) Charges for the use of communications channel in conjunction with a terminal arrangement or data services agreement are deemed gross income from the activity of providing telecommunication services.
(e) The following transactions are deemed direct customer services, provided that charges for such services are separately stated and maintained as provided by regulation 19-100.2(e):
(1) "Custom (computer) programming", which is any computer software which is written or prepared for a single customer, including those services represented by separately stated charges for the modification of existing prewritten programs.
a. Custom computer programming is deemed a professional service regardless of the form in which the programming is transferred.
b. Custom programming includes such programming performed in connection with the sale, rental, lease, or license for use of computer hardware, provided that the charges for such are separately stated from the charges for the hardware.
c. Custom computer programming includes a program prepared to the special order of a customer who will use the program to produce copies of the program for sale, rental, lease, or license. The subsequent sale, rental, lease, or license of such a program is deemed the sale, rental, lease, or license of a prewritten program.
(2) Training services related to computer hardware or software, provided further that:
a. The provider of such training services is deemed the ultimate consumer of all tangible personal property used in training others or provided to such trainees without separately itemized charge for the materials provided.
b. Training deemed a direct customer service does not include:
i. Training materials, books, manuals, etc. furnished to customers for a charge separate from the charge for training services.
ii. Training provided to customers without separate charge as part of the sale, rental, lease, or license of computer hardware or software, or as part of a terminal arrangement or data services agreement.
(3) The use of computer time through the use of a terminal arrangement or a data service agreement, but not charges for computer hardware located at the customer's place of business (for example, the terminal, a printer attached to the terminal, a modem used to communicate with the remote central processing unit over a telephone line).
(4) Compiling and producing, as part of a terminal arrangement or computer services agreement, original copies of statistical reports, graphs, diagrams, microfilm, microfiche, photorecordings, or other information for the same person who supplied the raw data used to create such reports.
(f) The purchase, rental, lease, or license for use of computer hardware, storage media, or computer software which is not deemed custom programming is deemed the use or storage of tangible personal property for the purpose of this chapter, and the amount which may be subject to use tax shall be determined in the same manner as the determination of the gross income from the sale, rental, lease, or license for use of such.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 9652, § 10, 1-14-02; Ord. No. 9840, § 6, 5-5-03)
Editors Note: It should be noted that the provisions of Ord. No. 9641 become effective retroactive to January 1, 2002.
Editor's note –
Ord. No. 11183, § 9, adopted June 17, 2014 and effective January 1, 2013, repealed Reg. 19-120.1, which pertained to food for home consumption, recordkeeping and reporting requirements.
(a) Refundable deposits shall be includable as gross income of the taxpayer for the month in which the deposits are forfeited by the lessee.
(b) Reserved.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 6938, § 22, 4-25-88; Ord. No. 8440, § 23, 1-23-95)
If a taxpayer collects taxes in excess of the combined tax rate from any customer in any transaction, all such excess tax shall be paid to the taxing jurisdictions in proportion to their effective rates. The right of the taxpayer to charge his customer for his own liability for tax does not allow the taxpayer to enrich himself at the cost of his customers. Tax paid on an activity that is not subject to tax or that qualifies for an exemption, deduction, exclusion or credit is not excess tax collected.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 10287, § 4, 6-13-06)
The following activities, when performed by a municipality, are considered to be activities of a person engaged in business for the purposes of this article, and not excludable by reason of section 19-270:
(1) Rental, leasing or licensing for use of real property to other than another department or agency of the municipality.
(2) Procuring, providing or furnishing electricity, electric lights, current, power, gas (natural or artificial), or water to consumers or ratepayers.
(3) Sale of tangible personal property to the public, when similar tangible personal property is available for sale by other persons, as, for example, at police or surplus auctions.
(4) Providing wastewater removal services to consumers or ratepayers by means of sewer lines or similar pipelines.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 11183, § 12, 6-17-14, eff. 1-1-13)
(a) Equity Requirements. In order to qualify for exclusion under section 19-270, a proprietary club must actually be owned by the members. For the purposes of qualification, a club will be deemed to be member-owned if at least eighty-five (85) percent of the equity of the total amount of club-owned property is owned by bona fide individual members whose membership is represented in the form of shares, certificates, bonds or other indicia of capital interest. A corporation may be considered an individual owner provided that it owns a membership solely for the benefit of one (1) or more of its employees and is not engaged in any business activity connected with the operation of the club.
(b) Gross Revenue Requirements. In computing gross revenue for the computation of this fifteen (15) percent rule of subsection 19-270(c)(1).
(1) The following shall be excluded:
a. Membership dues.
b. Membership fees which relate to the general admission to the club on a periodic (or perpetual) basis.
c. Assessments.
d. Special fund-raising events, raffles, etc.
e. Donations, gifts or bequests.
f. Gate receipts, admissions and program advertising for not more than one (1) tournament in any calendar year.
(2) The following must be included:
a. Green fees, court use fees, and similar charges for the actual use of a facility or part thereof.
b. Pro shop sales if the shop is owned by the club.
c. Golf cart rental if the carts are owned by the club.
d. Rentals, percentages or commissions received for permitting the use of the premises or any portion thereof by a caterer, concessionaire, professional or any other person for sales, rental, leasing, licensing, catering, food or beverage service, or instruction.
e. All receipts from food or beverage sales, room use or rental charge, corkage and catering charges, and similar receipts.
f. Locker and locker room fees and attendants charges if paid to the club.
g. Tournament entry fees other than entry fees for the one (1) annual tournament exempt under subsection (b)(1)(f) above.
(Ord. No. 6674, § 3, 3-23-87)
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